Lululemon Athletica (LULU) stock plunged about 19% in Friday’s pre-market trading, as the athletic apparel maker reported mixed results for the second quarter of Fiscal 2025 and lowered its full-year revenue and earnings guidance. The company blamed weak U.S. demand and tariffs for the guidance cut. LULU’s unimpressive guidance prompted rating downgrades by analysts at Stifel, William Blair, Evercore, and other firms.
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William Blair Downgrades LULU Stock to Hold from Buy
William Blair analyst Sharon Zackfia downgraded Lululemon stock to Hold from Buy without assigning a price target. The 4-star analyst moved to the sidelines due to the timing of a U.S. sales turnaround, a higher-than-expected impact from tariffs owing to the discontinuation of the de minimis provision, and signs of macro “noise” in China.
Zackfia now expects Lululemon to “lose a year of earnings,” with its new 2026 earnings per share (EPS) estimate of $14.18 below the incoming 2025 estimate of $14.41. Lululemon is now a “show-me story” when a new product hits in spring 2026, with few catalysts in the interim.
Other Analysts Also Move to the Sidelines on Lululemon Stock
Stifel analyst Peter McGoldrick downgraded Lululemon stock to Hold from Buy and slashed the price target to $205 from $324. McGoldrick lowered his Fiscal 2025 outlook significantly due to challenges in the domestic market and the removal of the de minimis exemption. He believes that “reigniting” brand momentum in the U.S. is likely to take longer than previously anticipated. McGoldrick believes that Lululemon’s model faces the “dual pressure” of slower sales and “external shocks” from trade policy.
Additionally, Evercore analyst Michael Binetti downgraded Lululemon stock to Hold from Buy and slashed the price target to $180 from $265. The 4-star analyst lowered his 2025 and 2026 EPS estimates. Binetti stated that while he expected several visible near-term negatives for LULU’s Q2 update, the company announced further important key performance indicators (KPIs) that were much more unfavorable than his expectations.
The unfavorable aspects highlighted by Binetti included further deceleration in the U.S. business, lowering of China’s FY25 sales growth outlook from 25%-30% to 20%-25%, and deteriorating innovation. Binetti added that tariff pressures and the removal of the de minimis exemption turned out to be a “far, far bigger issue” than what he anticipated.
As of writing, analysts at Oppenheimer and Telsey Advisory have also downgraded their ratings for LULU stock.
Is LULU a Good Stock to Buy Now?
Wall Street has a Moderate Buy consensus rating on Lululemon Athletica stock based on 12 Buys, 11 Holds, and one Sell recommendation. The average LULU stock price target of $267.76 indicates about 30% upside potential.
These ratings/price targets are expected to change based on further reactions from analysts.
